Trump & Musk: A tale of two struggling social media entrepreneurs

Bengaluru/Washington, NT Bureau: Trump Media & Technology Group (TMTG) recently acknowledged in their filings that their ability to attract users could be hindered if they prefer platforms not associated with former President Donald Trump. Ironically, Trump himself appears to be distancing from TMTG.

In a glitch-ridden discussion with Elon Musk on Monday night, Trump chose not to use Truth Social, the social network owned by TMTG, but rather X (formerly Twitter), which is now owned by Musk.

A Financial Times Opinion piece points out that both Trump and Musk are navigating significant challenges. The former president, trailing Kamala Harris in the polls ahead of November’s election, is struggling to maintain his political standing.

Meanwhile, Musk's X has suffered a massive loss in annual advertising revenue since his takeover in 2022, prompting Musk to allege an illegal conspiracy among major brands to harm his business.

Despite these hurdles, both Trump and Musk retain loyal followings and are convinced they deserve their own social networks.

Yet, their precarious business circumstances have led them to form an unlikely alliance. TMTG can be seen as a 'meme stock' that emerged from a tumultuous SPAC merger. In its latest quarter, TMTG generated only $800,000 in revenue.

The company is attempting to build a conservative media empire, encompassing not only Truth Social but also a fledgling streaming service focused on news, Christian content, and family-friendly programming.

With no debt, $344 million in cash, and grand ambitions, TMTG's market valuation stands at around $5 billion, nearly half of which is attributed to Trump himself.

In this way, TMTG functions as both a meme stock and a cash reserve built around Trump’s cult of personality. Establishing a legitimate business is challenging enough, but lacking Trump's unwavering support could prove disastrous. On the other hand, Musk’s X faces a different dilemma: it is burdened with $13 billion in debt.

However, Musk has access to hundreds of millions of users, a demographic Trump desperately wants to engage (Trump still has 88 million followers on X, compared to less than 10 million on Truth Social).

Musk might ponder whether his devoted followers would bolster X if it were publicly traded, similar to how Trump’s supporters have buoyed the much more precarious TMTG. For one night, politics and business made for an unusual partnership.